Carter: Economically rational investment
Clients receiving free consumer legal advice from agencies funded by the Access to Justice Foundation (ATJF) recover £10.40 in direct financial benefit for every pound invested, a report has found.
Researchers estimated that across all consumer cases, free legal advice generated an average financial recovery of £2,000 per client.
Eight in 10 advice providers (79%) described ATJF funding as “essential to their operations”, with a further 15% describing it as very important.
Local advice agencies, whether they were independent or part of a national organisation, were more likely to describe ATJF funding as “essential” than national or regional ones.
Consultancy Pragmatix Advisory gathered responses from 92 organisations funded by the ATJF which provided advice to 574,000 individual clients over the past year for the report Access All Areas: Assessing the consumer benefit of funding the free legal advice sector. They also carried out 17 in-depth interviews with representatives from providers.
The largest contributor in terms of financial recovery by clients was consumer credit and loan debt resolution, where the average recovery was around £11,900. Cost savings from housing cases averaged £1,200 per case and utility dispute resolution £164 per case.
Researchers said around 70% of cases with a consumer dimension resulted in a positive outcome, and the net value after accounting for adviser time was around £1,700 per client.
Almost all advice providers reported improved mental health as a consistent outcome for clients with consumer cases that were resolved.
More than eight out of 10 reported avoiding homelessness and maintaining or restoring stable housing for clients. A slightly lower proportion said clients had avoided court proceedings and improved their financial capability.
Other benefits were restored access to essential services and maintained or restored employment.
However, researchers said: “The cost-of-living crisis, the changes to the availability of legal aid across some areas of social welfare law and the closure of local advice services have together driven a sustained increase in demand that providers are struggling to meet.”
Seven in 10 advice providers said they had to turn away or refer on clients “regularly” due to capacity constraints – a quarter of people seeking help could not be seen.
The largest gaps in provision were in employment tribunal representation, where more than six out of 10 advice providers lacked capacity and in complex housing disrepair cases (59%). A majority of providers said they turned away clients with these cases.
Clare Carter, the foundation’s chief executive, said the report showed how “investing in a properly funded advice sector is not just the right thing to do – it is the economically rational one”.
It also challenged narrow definitions of consumer harm. While unsafe housing and problem debt were identified as the most common issues faced by clients, these were often excluded from mainstream understandings of consumer protection despite their significant impact on people’s lives.
She continued: “Going beyond the government definition of ‘consumer advice’ is critical in understanding the systematic impact of this sector. The work of our funded partners will not always address traditional consumer issues but will have immediate effect on a person’s capacity to function as a consumer.”
Providers anticipated that demand for their services would keep increasing and were aware of areas where they needed additional support, the report noted.
“Every interviewee could point to specific things they would do with additional resource, and in almost every case those things were concrete, modest, and directly tied to unmet need in their communities.
“The most immediate need, cited across almost every interview, was simply for funding to employ more people.”
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